Mortgage lending staggers to 16 year low
News that mortgage funding in August amounted to just £21.8 billion, down a massive twelve percent on the previous month, has again highlighted the current climate in the housing sector. At a time when there was hope that the likes of Barratt Developments and other majors in the sector could trade their way out of trouble, this looks an increasingly forlorn hope.
Mortgage lending in the UK has been on a gradual decline for most of the year, with only an unexpected jump in July breaking the pattern, and is expected to continue downwards. The issue of available finance is also becoming acute now with many banks struggling to attract new customers and others requiring some of the largest deposits seen in the UK market for many years. There is also a worrying trend towards high set-up fees with one mortgage provider charging £3,000 to set up a mortgage!
The Council of Mortgage Lenders (CML) has seen many members struggle over the last few months and it has issued a further downbeat statement for the immediate future. The CML is one of those associations which have been calling for an immediate cut in interest rates without much luck as yet.
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